Setting business aims and objectives (AQA GCSE Business): Flashcards

What's the difference: aims vs objectives?

Aims = broad, long-term goals; Objectives = specific, measurable targets

Top priority for new businesses

Survival

New business failure rate (5 years)

Over half fail

Main goal for commercial enterprises

Profit maximisation

Sales maximisation approach

Accept lower short-term profits for higher market share

What shareholders gain from rising share prices

Profit when selling shares in future

Quality objective focus

Excellent products/services over max profit

Danger of rapid expansion

Resource strain & survival threat

Four benefits of clear objectives

1. Direction 2) Focus 3) Planning 4) Success measurement

Easier to measure: financial or non-financial objectives?

Financial (quantifiable metrics)

Example: internal reason for objective change

Achieving one goal, setting new one

Example: external reason for objective change

New competition entering market

Small vs large firms: who changes objectives faster?

Small businesses (lower costs, less consultation needed)

Quality objectives: initial impact on profit

May reduce profit due to higher costs

Not-for-profit organisation objectives

Charitable/social purposes